Section 8 Companies

(2013)
Sec. 25 Companies
(1956)
Registered Co’s 2749
 Government of India -
functions as the Apex
Skill Development
Council for the Retail
Industry in India.

Kiit Technology Business Incubator

(KIITTBI)
Supported by - National Science & Technology
Entrepreneurship Development Board
(NSTEDB) & Department of Science &
Technology (DST), Government of India
The Coconada Chamber Of Commerce 1918 Vijayawada
Hyderabad Race Club Limited – 1971 Hyderabad
Methodist Church Of India – 1980 Hyderabad
Association of Lady Entrepreneurs of Andhra Hyderabad
Pradesh – 1994
Indian School of Business Hyderabad
Bokaro Club Limited Bokaro
Patna Golf Club – 1991 Patna
Gujarat Urban Housing Company Vadodara
Reliance Research Institute 1994 Ahmadabad
Swimming Education Research And Bangalore
Development Foundation
Indian Coffee Trade Association Bangalore
 Sec. 8
 CG may, by license issued…
 And on such conditions as it deems fit,
 Allow that - Person/Association of persons to
be registered as a Ltd. Co. U/T/S
 Without the addition to its name of the word
“Ltd”… - or Words “Pvt. Ltd” &
 Thereupon - ROC shall, on application…
register such Person/Assn. of Persons as a Co.
U/T/S.
 Sec 8 Cont…
(2) Co. - Shall enjoy all the privileges & be
subject to all the obligations of Ltd. Co’s.
(3) A firm may be a member of the Co.
registered U/T/S
 (4)(i) Co. - Shall not alter… its MOA / AOA
except with the Previous approval of CG.
(ii) Co. - may convert itself into Co. of any other
kind only after complying with such conditions
as may be prescribed.
(5) Where it is proved to the satisfaction of CG that -
A Ltd. Co. registered U/T/A or Under any previous
Co. law
Has been formed with any of the objects specified in
S/s(1)(a) &
With the restrictions & prohibitions as mentioned
It may, by license, allow the Co. to be registered U/T/S
Subject to such conditions as the CG deems fit & to
change its name by omitting the word “Ltd.”, or as the
case may be, the words “Pvt. Ltd” from its name &
Thereupon - ROC shall, on application… register such
Co. U/T/S & all the provisions of T/S shall apply to that
Co.
 Revoke - Licence
 (6) CG may, by order, revoke the licence granted
to a Co. registered U/T/S
 If the Co. contravenes any of the requirements of
T/S or
 Any of the conditions subject to which a licence is
issued or
 The affairs of the Co. are conducted fraudulently
or
 In a manner violative of the objects of the Co. or
 Prejudicial to public interest, & without prejudice
to any other action against the Co. U/T/A,
 Direct the Co. to convert its status & change its
name to add the word “Ltd” or the words “Pvt.
Ltd.”…
 To its name &
 Thereupon - ROC shall - without prejudice to any
action that may be taken U/Ss (7), on application...
Register the Co. accordingly:
• P… no such order shall be made unless - Co. is
given a reasonable opportunity of being heard:
• P… a copy of every such order shall be given to
ROC.
 Steps in public interest
(7) Where a licence is revoked -
CG may, by order - if it is satisfied that it is
essential in the public interest, direct that
the Co. be WU - U/T/A / Aamalgamated
with another Co. Registered U/T/S:
P… No such order shall be made unless -
Co. is given a reasonable opportunity of
being heard.
(8) Where a licence is revoked & where CG is
satisfied that - It is essential in the public interest
that - Co. should be amalgamated with another
Co. Registered U/T/S & having similar objects,
then,
N/A/T/T/Contrary contained in T/A,
CG may, by order - Provide for such
amalgamation to form a single Co.
 With such constitution, properties, powers,
rights, interest, authorities & privileges &
with such liabilities, duties & obligations as
may be specified in the order
 Sec. 8 (9) & (10)
 If on the WU / Dissolution of a Co. registered U/T/S -
There remains –
 After the satisfaction of its debts & liabilities,
Any asset,
 They may be transferred to another Co.
registered U/T/S & having similar objects,
 Subject to such conditions as NCLT may impose/
 May be sold & proceeds thereof credited to the
Rehabilitation & Insolvency Fund formed U/S 269.
 (10) A Co. registered U/T/S shall amalgamate only with
another co. registered U/T/S & having similar objects.
 Penalties - Sec 8 (11)
(11) If a Co. makes any default in complying with any of
the requirements laid down… Co. shall, without
prejudice to any other action U/T/P/o/T/S –
 Be punishable with fine which
 Shall not be less than Rs. 10 lakh but
 Which may extend to Rs. 1 crore &
 The directors & every officer of the co. who is in default shall
be
 Punishable with imprisonment for a term - extend to 3 years
or
 With fine which shall not be less than Rs. 25,000 - Rs. 25 lakh,
or with both:
P… when it is proved that the affairs of the co. were
conducted fraudulently, every officer in default shall be
liable for action U/S 447
 Foreign Company 2 (42)
 Means any Co. or body corporate incorporated
outside India which, -
(a) has a place of business in India whether
by itself or through an agent, physically or
through electronic mode; &
(b) Conducts any business activity in India in
any other manner.
Investigation, etc., of Foreign Co’s – Sec. 228
 Provisions of Chapter XIV shall apply mutatis mutandis
to inspection, inquiry or investigation in relation to
FC’s.
 Application of Act to FC’s - Chapter XXII
Co’s Incorporated Outside India Ss 379
 Where not less than 51% of the paid-up SC
 Whether equity / preference / partly equity & partly
preference - of a F.C. is held
 By one or more citizens of India or by one or more
Co’s or bodies corporate incorporated in India, or
 By one or more citizens of India & one or more co’s
or bodies corporate incorporated in India,
 Whether singly or in the aggregate,
 Such Co. shall comply with the P/o/T/Ch. &
such other P/o/T/A…with regard to the business
carried on by it in India as if it were a Co.
incorporated in India.
Documents, etc., to be delivered to ROC by FC’s - Sec. 380
 Accounts of foreign co. Sec. 381
 (1) Every FC shall, in every calendar year, -
(a) Make out a balance sheet & profit & loss
account… containing such particulars & including
or having annexed or attached thereto such
documents as may be prescribed; &
(b) Deliver a copy of those documents to the ROC:
 P… CG may, by notification, direct that, in the case of any FC
or class of FC co’s, the requirements of cl. (a) shall not apply, or
shall apply subject to such exceptions & modifications…
 (2) Document…mentioned… in the English language.
 (3) Every FC shall send to the ROC along with the documents…
a copy of a list… of all places of business established by the co.
in India as at the date with reference to which the balance
sheet… is made out.
Display of name, etc., of FC Sec. 382
 Service on FC – Sec. 383
Any process, notice, or other document
required to be served on a FC shall be
deemed to be sufficiently served
If addressed to any person whose name &
address have been delivered to the ROC
U/S 380 & left at, or sent by post to, the
address which has been so delivered to
the ROC or by electronic mode.
 Debentures, Annual Return, Registration of Charges,
Books of Account & their inspection – Sec. 384
(1) P/o/S 71 shall apply mutatis mutandis to a FC. (Debentures)
(2) P/o/S 92 shall, subject to such exceptions, modifications & adaptations as may
be made therein by rules made U/T/A, apply to a FC as they apply to a company
incorporated in India. (Annual Return)
(3) P/o/S 128 shall apply to a FC to the extent of requiring it to keep
at its principal place of business in India, the books of account
referred to in that section, with respect to monies received & spent,
sales & purchases made, & assets & liabilities, in the course of or in
relation to its business in India. (Accounts of Co’s)
(4) The P/o/Ch. VI shall apply mutatis mutandis to charges on properties which are
created or acquired by any FC. (Registration of Charges)

(5) P/o/Ch. XIV shall apply mutatis mutandis to the Indian business
of a FC as they apply to a co. incorporated in India. (Inspection,
Inquiry & Investigation).
 Fee for registration of documents Sec. 385 &
Interpretation – Sec. 386
 Shall be paid to the ROC - For registering any
document required by T/P/o/T/Ch. to be registered…
such fee, as may be prescribed.
 For the purposes of the foregoing P/o/T/Ch. -
 (a) Certified - Means certified in the prescribed
manner to be a true copy or a correct translation;
 (b) Director - In relation to a FC, includes any person
in accordance with whose directions or instructions the
BOD of the co. is accustomed to act; &
 (c) Place of business - Includes a share transfer
or registration office
Dating of prospectus & particulars to be contained
therein Sec. 387
 (1) No person shall -
 Issue, Circulate or Distribute in India any
prospectus offering
 To subscribe for securities of a co. incorporated
or to be incorporated outside India,
 Whether the co. has or has not established, or
when formed will or will not establish, a place
of business in India, unless the prospectus is
dated & signed, & -
(a) contains particulars with respect to the following matters,
namely:-

(i) Instrument constituting or defining the constitution of the co.

(ii) Enactments or provisions by or under which the incorporation of

the co. was effected;
(iii) Address in India where the said instrument, enactments or
provisions, or copies thereof, & if the same are not in the English
language, a certified translation thereof in the English language can
be inspected;
(iv) Date on which & the country in which the co. would be or was
incorporated; &
(v) whether the co. has established a place of business in India &, if
so, the address of its principal office in India; &
(b) states the matters specified U/S 26:
Provided that S/Cl. (i), (ii) & (iii) of clause (a) of T/Ss shall
not apply in the case of a prospectus issued more than two
years after the date at which the co. is entitled to
commence business.
(2) Any condition requiring or binding an applicant for
securities to waive compliance with any requirement
imposed by virtue of Ss (1), or Purporting to impute him
with notice of any contract, documents or matter not
specifically referred to in the prospectus, shall be void.
(3) No person shall issue to any person in India a form of application
for securities of such a co. or intended co. as is mentioned in Ss (1),
unless the form is issued with a prospectus which complies with
T/P/o/T/C & such issue does not contravene the provisions of Sec.
388:
 P… this Ss shall not apply if it is shown that the form of
application was issued in connection with a bona fide invitation to
a person to enter into an underwriting agreement with respect to
securities.
 (4) This section –
 (a) Shall not apply to the issue to existing members or debenture
holders of a co. of a prospectus or form of application relating to
securities of the co., whether an applicant for securities will or will
not have the right to renounce in favour of other persons; &
 (b) Except in so far as it requires a prospectus to be dated, to the
issue of a prospectus relating to securities which are or are to be in
all respects uniform with securities previously issued & for the
time being dealt in or quoted on a RSE, but, subject as aforesaid,
T/S shall apply to a prospectus or form of application whether
issued on or with reference to the formation of a co. or
subsequently.
• (5) Nothing in T/S shall limit or diminish any
liability which any person may incur under any
law for the time being in force in India or U/T/A
apart from T/S.
 Provisions as to expert’s
consent & allotment - Sec. 388
 (1) No person shall issue, circulate or distribute in India any prospectus
offering for subscription in securities of a co. incorporated or to be
incorporated outside India, whether the co. has or has not been established,
or when formed will or will not establish, a place of business in India -
 (a) if, where the prospectus includes a statement purporting to be made by an
expert, he has not given, or has before delivery of the prospectus for
registration withdrawn, his written consent to the issue of the prospectus with
the statement included in the form & context in which it is included, or there
does not appear in the prospectus a statement that he has given & has not
withdrawn his consent as aforesaid; or
 (b) if the prospectus does not have the effect, where an application is made in
pursuance thereof, of rendering all persons concerned bound by all the
provisions of SS 33 & 40, so far as applicable.
 (2) For T/P/o/T/S, a statement shall be deemed to be included in a prospectus,
if it is contained in any report or memorandum appearing on the face thereof
or by reference incorporated therein or issued therewith.
 Registration of Prospectus Sec. 389
 No person shall issue, circulate or distribute in India any
prospectus offering for subscription in securities
 of a co. incorporated or to be incorporated outside India,
 whether the co. has or has not established, or when formed will
or will not establish,
 A place of business in India, unless before the issue, circulation
or distribution of the prospectus in India,
 A copy thereof certified by the chairperson of the co. & two
other directors of the co. as having been approved by resolution
of the managing body has been delivered for registration to the
ROC & the prospectus states on the face of it that a copy has
been so delivered, & there is endorsed on or attached to the
copy, any consent to the issue of the prospectus required by Sec.
388 & such documents as may be prescribed.
 Application of sections 34 to 36 & Ch. XX S. 391
 (1) P/o/SS 34 to 36 (both inclusive) shall apply to
 (i) the issue of a prospectus by a co.
incorporated outside India U/S 389 as they
apply to prospectus issued by an Indian co.;
 (ii) the issue of IDR by a FC.
 (2) P/o/Ch. XX shall apply mutatis mutandis for
closure of the place of business of a FC in India
as if it were a co. incorporated in India.
 Punishment for contravention Sec. 392
 Without prejudice to T/P/o/S 391, if a FC contravenes
the P/o/T/C,
 FC shall be punishable with fine which shall not be less
than Rs. 1 lakh but which may extend to Rs. 3 lakh &
 In the case of a continuing offence, with an additional
fine which may extend to Rs. 50,000 for every day after
the first during which the contravention continues &
every officer of the FC who is in default shall be
punishable with imprisonment for a term which may
extend to 6 months or with fine which shall not be less
than Rs. 25,000 but which may extend to Rs. 5 lakh, or
with both.
Co’s failure to comply with P/o/T/Ch. not to affect
validity of contracts, etc. Sec. 393
 Any failure by a Co. to comply with T/P/o/T/Ch.
shall not affect the validity of any contract,
dealing or transaction entered into by the co. or
its liability to be sued in respect thereof, but the
co. shall not be entitled to bring any suit, claim
any set-off, make any counter-claim or institute
any legal proceeding in respect of any such
contract, dealing or transaction, until the co. has
complied with the provisions of this Act
applicable to it.
 Chapter XV Compromises, Arrangements & Amalgamations - Merger or
amalgamation of co. with foreign co. Sec. 234

(1) P/o/T/C unless otherwise provided under any other law for the time being
in force, shall apply mutatis mutandis to schemes of mergers & amalgamations
between co’s registered U/T/A & co’s incorporated in the jurisdictions of such
countries as may be notified from time to time by the CG:
Provided that the CG may make rules, in consultation with the Reserve Bank
of India, in connection with mergers and amalgamations provided under this
section.
(2) Subject to the provisions of any other law for the time being in force, a
foreign company, may with the prior approval of the Reserve Bank of India,
merge into a company registered under this Act or vice versa and the terms and
conditions of the scheme of merger may provide, among other things, for the
payment of consideration to the shareholders of the merging company in cash, or
in Depository Receipts, or partly in cash and partly in Depository Receipts, as
the case may be, as per the scheme to be drawn up for the purpose.

Explanation. - For the purposes of sub-section (2), the expression “foreign

company” means any company or body corporate incorporated outside India
whether having a place of business in India or not.